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A couple of things to add to FBBL07 very good post.
On the daily graph, we can see that after yesterday's hammer and with a neat green candlestick, the market reached the 143.40 target given yesterday : the upper bollinger, the upper oblique of the rising channel and also the lower hedge of the ICHIMOKU cloud.
The down trend the Bund was in since december 10 seems over but it is still to be seen whether an uptrend will take place or some horizontal drift.
The cloud is rather thin but will become thicker next week, making it more difficult to be passed trhough.
On the ut 4h graph, we can see that the horizontal resistance of the rising square triangle has been overcomed. It was with heavy volume. Final target given by such event is 144.80. Upper targets of rising square triangles are reached nine times over ten.
In order to achieve such target, the Bund must however pass above the cloud and it might take some time.
144.05, january 24th top could be a resistance while 143.08 is an obvious support level.
On the 4h graph, we can also see a summit doji in tombstone and fast stochastics at the top. Before going any higher,the top reached after 5.30 pm (143.60) will have to be overcome.
I would not be surprised such level to be tested during physical bund trading hours. A rejection would be a clear sign for today that the market will not go any higher this week.
A range between 143.60 and 143.00 is the more likely for friday in my opinion.
A wide balance now formed, we are at its value area high. Shorts are preferable, however because of the wideness, both longs and shorts can be valid depending on the profit targets.
SUPPORT (questionable)
143.31
143.14-15
143.00
142.60
Friday was an up day, average volume and range. The net gain (rise above Thursday's high) was not very high. But the daily chart shows a nice up trend since 2013-01-30 now.
The 60-minute chart shows 143.50 as daily PoC. The VA sits almost completely above Thursday's, shows only small overlap. The next PoC up is 143.97.
Though Friday was an up for stock markets too, those look weak. If stock markets start to drop, they will push up treasuries. Additional, there is some insecurity in the European markets: the outcome of the Italian election and the down grade of GB by Moody's.
Looking at the intraday charts I see 143.40 as solid support. A drop with normal volume to this level and I'll be looking for a long position. A (fast) drop on high volume could result in a pullback in the recent up trend. A drop below 143.20 jeopardizes the recent up trend.
On the up side the level of 143.97 looks interesting: the composite volume profiles show a valley up to that level. The high of the 2013-01-24 (144.08) then is not far away. Though I think it a bit unlikely that the market will move to this level with ease. If it does so, a nice short opportunity should arise.
Best for tomorrow will probably be to wait for the open of stock (and cash) markets, to see how they react to the latest news.
A glance at the weekly candle, an almost passer by of belt, reaching the mid bollinger level on a weekly basis, lower bollinger being at 141.31 and upper at 146.06.
In the day graph, we can see that friday candle is a spinning top, the upper shadow in contact with the upper oblique of the upward channel. It is also obvious that, for the time being, the cloud was able to refrain the Bund future to go higher and that closing level was almost at the lower hedge of the cloud.
As long as the Bund future market does not, on a 4 hours basis, closes below 143.00, 144.80 target is still valid.
The issue is therefore whether the market will have the strength to pass through the cloud or if it will need to retrace, and to which level, in order to gain sufficient momentum to continue the upward move.
Monday, apart from the Italian elections, the news flows is very scarce and unless Silvio Berlusconi and his ally Beppe Grillo are able to jeopardize center left ability to manage the country, I am expecting the Bund market, which is some sort of panic thermometer to retrace part of thursday and friday gains and to drift with no trend before the result of such elections is knonw.
As far as resistances are concerned, I only see 144.04, january 24th top. Regarding supports, 143.20, where weekly pivot point lies, seems to me an interesting point, 143.16 being the friday low where a strong reaction occured around noon on such day.
I broadly agree with FGBL07 strategy : to cautiously wait for the stock market opening and to take it from there.
We got above the previous balance, rejected POC and got to the high of a bigger balance. We might still go higher up to the very high, though the area around 143.73 is really thin.
Well above average volume and double the average range. An up day. But PoC = 143.50, same as yesterday.
Till 11:00 CET the market traded in a 34-tick range. Then it started to drop and at 13:30 CET the market started to drop fast and on rising volume till its LoD of 142.85 at 15:30. Then the first forecast for the outcome of the election for the Italian Senate became known and the market turned around forming a vicious V-Bottom. From here it rose till the very close. HoD of 144.46.
Stock markets and EURUSD also went bananas. ESTX and DAX were up almost 2% in the morning only to give it all back and turn red.
Again the 5-day volume profiles show only support levels. PoC is 143.50. Next PoC up is 145.34. Looking at the composite volume profile I think the level around 144.80 may offer some resistance.
The daily chart shows that the market has risen above the high of 2013-01-24, the day the last leg of the down swing from 2012-12-10 started.
The daily volume profile shows the same PoC (143.50) as yesterday. The volume distribution has a very thin upper part - due to the late hours when this up swing was made. It shows two peaks: one around its PoC and another one around 142.98. Though the upper part of the volume profile is thin the volume compared to the averages for this time of day is very high.
Usually this buying is likely to have some follow-through tomorrow: But after such a monster move I'm not so sure. Maybe we see a pullback to the VAH (=143.84).
Again it will depend upon the development in the stock markets. I'll watch the news and wait for the stock markets to open.
I'm not sure the drop in the stock markets was caused by the European events alone: The Fiscal Cliff (or Sequester) is rising its head again.
There is only one regular report scheduled for tomorrow: New Home Sales at 16:00 CET (= 10:00 EST).
What a day... We rejected the previous huge POC again and shot up, the upper part is very thin and full of areas of rejection starting from 143.87 up. Though the up move till the very end usually has some momentum, the thin area may behave as vacuum (and the markets abhor vacuum). We will see as the day unfolds.
My ego can't resist the pleasure to quote my last post.
" As long as the Bund future market does not, on a 4 hours basis, closes below 143.00, 144.80 target is still valid.The issue is therefore whether the market will have the strength to pass through the cloud or if it will need to retrace, and to which level, in order to gain sufficient momentum to continue the upward move.
Monday, apart from the Italian elections, the news flows is very scarce and unless Silvio Berlusconi and his ally Beppe Grillo are able to jeopardize center left ability to manage the country, I am expecting the Bund market, which is some sort of panic thermometer to retrace part of thursday and friday gains and to drift with no trend before the result of such elections is knonw".
Market opened within friday range, went a bit upper the IB, then explored the down side and accelerate down whith the hope that in Italy, center left would control both parliament and senate.
Reactive buyers appeared at 142.84 where a double bottom was made between 3 and 3.30 pm. Such level was 9 ticks higher than fryday's low and, as can be seen on the 4H graph, matches with MA 44.
Between 3.30 and 4 pm, the market gained about 50 ticks on the ground that Berlusconi and Grillo could make life difficult in the senate for Bersani and friends. It was then clear that the 144.80 target was still valid.
After 5.30 pm session saw a further increase in the market of a shade less than 100 ticks on what I see as a panic buying move allowed by the small volumes available for sale : 70% of day volume are concentrated between 143.11 and 143.71 with a real node at 143.50, which means that the rise after 5.30 pm, from 143.52 to 144.47 was made with very few lots, if you discount from the remaining 30% the volumes traded between 143.52 and 143.71 in the morning.
POC of the day is a shy 143.54, actually lower than yesterday's 143.57.
Result of the day is a huge green candle that perforate the cloud and goes far beyond the resistance oblique of the upward channel.
What's for tomorrow ?
Advocating for a possible retracement of the rise, volumes on the session after 5.30 pm are low, POC is lower than yesterday. For the continuation of the upward move, the cloud is now in support and the target is only 40 ticks higher. The 144.80 target is actually very close to 2013 high (144.84).
143.50 seems to me a strong support level with 143.73, last week high, an interesting level would the market retrace. 144.84 is an obvious resistance that should be tested within the week.
